Research On The Influence Of Party Organization Participation In Governance On Enterprise Excessive Financialization

Since the 18th Chinese Communist Party’National Congress,the Party Central Committee has comprehensively strengthened the Party’s leadership,and the corporate governance mechanism which the Communist Party organization participates in has kept being standardized and perfect unceasingly over time.As one of the important features of China’s corporate governance structure,the participation of party organizations in governance plays an requisite role.Over last several years,due to the depression of the international macroeconomic environment,the domestic real economy is at a low level of the economic cycle,and some industrial-based companies have entered high-leverage industries such as finance and real estate,trying to use the cross-industry arbitrage mechanism to achieve multiple profits.The prosperity of the virtual economy has prompted many social and economic entities to change from real to virtual,and the trend of "financialization" of entity enterprises is becoming more and more apparent.Although financial assets act as a"reservoir" of funds,most studies are more supportive of the "crowding out" effect of financialization on real investment.Among them,excessive financialization,as a short-sighted behavior that focuses on speculation and profitseeking,squeezes out investment funds in the main business in the short term,damage to the business economic expressiveness of firms in the future,so that it’s harmful to the long-term real economy’s stabilization.The introduction of many relevant policies also reflects the country’s attention to the impact of corporate financialization.Therefore,based on the existing literature on the impact of party organization participation in governance on the corporate’s operating efficiency and financial status,this thesis deeply studies the influence of party organizations’ participation in corporate governance on the excessive financialization of enterprises.Furthermore,the property relations’moderating effect and the property right nature’heterogeneity effect are analyzed,and the important time nodes related to the governance of the party organization is further analyzed.All the data in this article comes from Shanghai and Shenzhen stock exchanges a-share,and selected non-financial listed companies from 2010 to 2020 as research samples,and manually collects and sorts out the data on the degree of party organization participation in corporate governance,and it also investigates the degree of party organization’s participation in governance relationships with the excessive financialization of companies.According to the research:Initially,the party organization’s participation in corporate governance restrains the enterprises’ excessive financialization.Participation in governance of the party organization can make it better play its role in strategic guidance beforehand,supervision and management during the event,and accountability and punishment after the event,and urges enterprises to actively respond to the policy orientation of "avoiding economic deviance from reality to reality",which is conducive to national strategies such as "vigorously develop the real economy"Implemented within the enterprise will help to restrain the excessive financialization of the enterprise.Second,financing constraints negatively weaken the relationship between party organization governance and corporate excessive financialization.The greater the financing constraints,the weaker the attenuation and inhibition of the party organization’s participation in corporate governance on the excessive financialization of enterprises.Finally,compared with private enterprises and before 2016,the state-owned firms and after 2016 have demonstrated the restraining effect of Party organization governance on excessive financialization of enterprises.The research results expound the rationality of giving full play to the governance role of the party organization at the company’s internal management level,provide a more rigorous theoretical basis for the implementation of relevant regulations on party organization governance,and provide further guidance for companies that have not implemented this policy system.Decision-making provides a useful reference.At the same time,it improves the influencing factors of corporate financialization and the theoretical research on corporate governance with Chinese characteristics,provides more empirical evidence for academic research in this field,and has important practical significance for guiding finance to help the high-quality development of the real economy.